Sept 8 HK/CHINA markets turn to consolidate on policy uncertainty

08 Sep

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HSI -33pts (-0.1%) 26,321 HSCEI -19pts (-0.2%) 9,449 T/O HK$152.19bn (+10.3% DoD)

Markets opened lower and selling down.
Data due  
Non Farm Payrolls Q2  +1.1% QoQ vs +0.6% Q1 revised (F/cast was 1%)
Private Non Farm Payrolls Q2 +1.4% QoQ vs +0.8% Q1 revised (F/cast was +1.2%)
Balance of Trade Jul €-6.96B vs €-6.05B Jun (F/cast was €-6.2B)
Current Account Jul €-3.5B vs €-0.9B Jun (F/cast was €-1.6B)
US Futures
Opened in Asia; Dow -15 pts. S&P 500 and Nasdaq 100 futures unchDow now -6pts S&P and NDX unch
AHEAD MBA 30 yr Mortgage Rate and Mortgage Applications, Redbook, IBD/TIPP Economic Optimism, JOLTs Job Openings, NYFed Treasury Purchases TIPS 1 to 7.5 yrs, Consumer Credit Change, API Crude Oil Stock Change.

CSI 300 closed -21pts (-0.4%) @ 4,972
CSI 300 opened lower but rallied to test 5,013 a couple of times before reversing found support around 4,980 level going into lunch. PM opened lower and selling down some support at 4,960. Concerns about the impact of ‘common prosperity’ as the Peoples Daily publishes and article confirming China’s commitment to opening up its economy to foreign investors. Apple supply chain names +VE

Shanghai Composite -1.4pts (unch) @ 3,675 T/O US$95,903bn +1% DoD
Shenzhen Composite -15pts (-0.1%) @ 14,688 T/O US$124,172bn +7% DoD
ChiNext Composite Index +28pts (+0.8%) @ 3,554

PPI and Inflation data tomorrow on the open.
China's retail sales of new energy vehicles in August reached 249,000 units, representing a year-on-year increase of 167.5% and a month-on-month increase of 12%, as shown by the data of China Passenger Car Association (CPCA).

Pre market opened @ 26,396 +43pts -11pts ADR’s
Market rallied to 26,560 but then reversed and sold down heavily; without a clear indication. PM market trended higher but seeing resistance as it approached flat and traded sideways as China closed the market dipped again and then traded sideways but saw a 50pts spike in the closing auction.
Evergrande weak open as it sees a downgrades; from Fitch and GS but then rallied through the day to close +3.9% just off the day high.
Macau names +VE on new border opening
SHKP (16 HK) +0.2% ahead of earnings tomorrow

HK reported 2 new covid cases; 
both imported.

After Market News
CATHAY PAC AIR (00293.HK)  +0.210 (+3.196%)    Short selling $1.96M; Ratio 12.592%   provided its staff with enough information about vaccination over the past six months,
local media citing an internal memo from General Manager Inflight Service Delivery. With the deadline already passed, the airline decided to sack today (8th) a few unvaccinated aircrew members failing to provide any medical proof.

Tesla (TSLA.US)  +19.350 (+2.638%)    sold 44,264 China-made electric vehicles in August,
an increment of 34% from 32,968 in July, as shown by the data of China Passenger Car Association (CPCA).

POLY PROPERTY (00119.HK)  -0.030 (-1.422%)    Short selling $180.60K; Ratio 3.962%   announced that, for the eight months ended 31 August 2021, the group has recorded contracted sales of approximately equivalent to RMB36.4 billion, up 27.27% YoY, with contracted area sold totaling approximately 2.118 million square metres.

In August 2021, China's retail sales of passenger vehicles reached 1.453 million units, marking a year-on-year decrease of 14.7%, 
and a decrease of 7% compared to August 2019, with meager growth rate, as shown by the data of China Passenger Car Association (CPCA).

SHORT SELLING Wednesday 21.7% vs 17.5% Tuesday
Top shorts  
CM Bank (3968) 44%, Bank of China (3988) 43%, Wharf REIC (1997) 36%, ICBC (1398) 36%, MTRC (66) 32%, Henderson Land (12) 32%, CCB (939) 32%, Power Assets (6)  31%,  AIA (1299) 29%, HKEX (388) 29%, CK Assets (1113) 29%,  WH Group (288) 28%, Country Garden (2007) 28%, Sunny Optical (2382) 26%, Shenzhou (2313) 26%, Sands China (1928) 26%, Mengniu Dairy (2319) 25%, China Life (2628) 25%, Tencent (700) 24%

Regional Markets
Market sold down to 7,476 in early trades on weak Material and Consumer Stock and some companies going Ex Div but Financials +VE. Market worked better from the early prints but saw resistance around 7,530 level and then trended slightly lower to close -18pts (-0.2%) @ 7,512.
Iron ore prices rebounded but Oil and Gold remain weak.
Nikkei opened lower but rallied to test 30,200 pre lunch on good GDP data pre market. PM opened lower and trading sideways around the 30,050 level but then rallying to close +265pts (+0.9%) @ 30,181.
Leaders Telcos, Trading Cos, Paper and Banks
Laggards (relative) Financials, Defensives, and Transport.
Heavyweights like Nintendo, Fast Retailing and Sony weak.
Cosmetics +VE in the Consumer Space,
Topix trading in a similar fashion to close +16pts (+0.8%) @ 2,080 but on lighter volume.
GDP Growth Data
Growth Rate Q2 +0.5% QoQ vs -1.1% Q1 revised (F/cast was +0.3%)
Growth Annualised Q2 +1.9% vs -4.2% Q1 revised (F/cast was +1.3%)
Capital Expenditure Q2 +1.4% QoQ vs -0.9% Q1 revised (F/cast was +1.7%)
Price Index Q2 -1.1% YoY vs -0.2% Q1 revised (F/cast was -0.7%)
External Demand Q2 -0.3% QoQ vs -0.2% Q1 (F/cast was -0.3%)
Private Consumption Q2 +0.9% QoQ vs -1.3% Q1 revised (F/cast was +0.8%)
Current Account Jul ¥1910.8B vs 905.1b Jun (F/cast was 2000b )
Bank Lending Aug +0.6% YoYvs 1% Jul (F/cast was 1%)
Eco Watchers Outlook Aug 43.7 vs 47.7 Jul (F/cast was 48)
Eco Watchers Current Aug 34.7 vs 48.4 Jul (F/cast was48.6)
S Korea
Kospi opened lower and tested to 3,168 in early trades before rallying to test Tuesday’s close but failed to break above. Then sold down to 3,157 before trading sideways and closed -24pts (-0.8%) @ 3,163. Regulatory concerns worry the market prompting a rotation into Tech, Exporters and Re-opening names. Financials +VE as FinMin suggests more rate hikes ahead.
Kosdaq Initially sold down to the 1,045 level before a bounce but then sold down to 1,040 level and traded sideways around that level; currently -14pts (-1.4%) @ 1,040
Ahead Options Expiry Friday.
Taiex opened flat but trended lower through the session to close -158pts (-0.9%) @ 17,271
T/O was US$11.59bn vs US$12.12bn Tuesday has been falling all week
CECC reported 9 new covid cases (2 imported)

Northbound RMB 61,577m Sell 32,230m vs 29,347m Buy
Southbound HK$  15,013m Sell   8,401m vs   6,613m Buy
Northbound RMB 76,792m Sell 37,763m vs 39,029m Buy
Southbound HK$  19,751m Sell   8,612m vs 11,139m Buy

Active Heavyweights:
TENCENT (00700.HK)  +9.000 (+1.746%)    Short selling $2.51B; Ratio 22.192%   closed at $524.5, up 1.7%
MEITUAN (03690.HK) +3.600 (+1.399%) Short selling $683.02M; Ratio 14.871% closed at $261, up 1.4%
HKEX (00388.HK) -5.000 (-0.994%) Short selling $157.59M; Ratio 26.949% closed at $498, down 1%
BABA (09988.HK) +0.900 (+0.529%) Short selling $430.32M; Ratio 17.546% closed at $170.9, up 0.5%
PING AN (02318.HK) -0.200 (-0.327%) Short selling $78.93M; Ratio 12.616% closed at $61.05, down 0.3%
AIA (01299.HK) -0.300 (-0.316%) Short selling $328.16M; Ratio 26.028% closed at $94.65, down 0.3%

HSI & HSCEI Constituents on Move:
TECHTRONIC IND (00669.HK)  -9.000 (-5.178%)    Short selling $100.67M; Ratio 22.098%    closed at $164.8, down 5.2%
GALAXY ENT (00027.HK) +2.550 (+4.956%) Short selling $89.68M; Ratio 10.724% closed at $54, up 5%
WH GROUP (00288.HK) -0.270 (-4.478%) Short selling $21.55M; Ratio 17.565% closed at $5.76, down 4.5%
HAIDILAO (06862.HK) +1.400 (+4.459%) Short selling $50.51M; Ratio 15.505% closed at $32.8, up 4.5%
LI NING (02331.HK) -4.400 (-4.085%) Short selling $112.55M; Ratio 16.971% closed at $103.3, down 4.1%
EVERGRANDE (03333.HK) +0.140 (+3.922%) Short selling $27.04M; Ratio 8.799% closed at $3.71, up 3.9%
ANTA SPORTS (02020.HK) +6.100 (+3.817%) Short selling $240.99M; Ratio 24.495% closed at $165.9, up 3.8%
WHARF REIC (01997.HK) +1.350 (+3.321%) Short selling $69.84M; Ratio 42.808% closed at $42, up 3.3%
GEELY AUTO (00175.HK) -0.900 (-3.141%) Short selling $202.55M; Ratio 24.566% closed at $27.75, down 3.1%
XINYI GLASS (00868.HK) -0.950 (-3.050%) Short selling $29.43M; Ratio 24.559% closed at $30.2, down 3%

HSMI & HSSI Constituents on Move:
CIMC (02039.HK)  +0.920 (+5.174%)    Short selling $11.85M; Ratio 23.337%    closed at $18.7, up 5.2%, hitting new high
CHALCO (02600.HK) +0.240 (+3.896%) Short selling $54.14M; Ratio 9.497% closed at $6.4, up 3.9%, hitting new high
CGN POWER (01816.HK) +0.070 (+3.627%) Short selling $9.25M; Ratio 3.705% closed at $2, up 3.6%, hitting new high
CGN NEW ENERGY (01811.HK) +0.090 (+1.633%) Short selling $17.16M; Ratio 9.095% closed at $5.6, up 1.6%, hitting new high


China's Ministry of Education issued a notice regarding certain improper AST activities, demanding all institutions to adhere to relevant requirements set out by the government when offering AST activities, in terms training subject, personnel, length of time, location, etc..  
The notice listed out seven different types of improper AST activities which the ministry pledged to investigate and punish accordingly, including organizing AST activities through institutions or individuals without appropriate licenses and offering AST services in the name of non-academic subjects.

HENDERSON LAND (00012.HK)  -0.450 (-1.308%)    Short selling $13.24M; Ratio 38.097%   's residential project located in Kai Tak "THE HENLEY III" has uploaded the third price list, offering 81 units with unit area of 229-778 sq. ft., expressed Thomas Lam, general manager of sales department of Henderson Property Agency. The price list's discounted selling prices range between $6.1598 million and $25.4324 million.

Founder of the hedge fund Bridgewater, Ray Dalio, expressed when attending an event, that the investment opportunities in China and Singapore should not be overlooked, while remarking that its family office targets to venture into the two Asian markets in both economic and investment capacity. Dalio reiterated his support for the reformation of capital markets. The hedge fund founder stated that there was no philanthropy in China when he first visited the country, but now charity activities have begun to flourish in China as a means to achieve redistribution of social resources.

Sino Group's Ng Teng Fong Charitable Foundation and CHINESE EST H (00127.HK) donated a new Grand Central flat (measuring 449 sq.ft.) as the Vaccination Lucky Draw ultimate prize. The winner was this afternoon from among over 2.5 million registrants.  
Sino and CHINESE EST H vowed earlier to donate another Grand Central flat (measuring about 468 sq.ft.) for the Phase 2 Lucky Draw, should there be five million Hong Kong citizens taking at least one Covid jab by end-September. The registration period will close on 30 September. Winners will be randomly drawn on 7 October.

The Shenzhen Municipal People's Government will issue offshore RMB bonds in Hong Kong next month, making it the first Chinese local government to offer bonds in the city, said Chief Executive Carrie Lam before the Legislative Council.  
With the Shenzhen-Hong Kong financial cooperation in a new phase, Hong Kong must equip itself for significant measures tied to its status as an international financial center, she added.

Sensor Tower published a report on the August revenue ranking of mobile game publishers around the globe in App Store and Google Play, with 39 Chinese publishers listed within the top 100, amassing revenues of nearly USD2.43 billion in total, which accounts for 39.4% of the total revenues of the top 100 mobile game publishers worldwide.  As for the revenue ranking for Chinese mobile game publishers, TENCENT (00700.HK), NTES-S (09999.HK) and miHoYo retained their respective spots as first to third.

The Hong Kong chief executive Carrie Lam disclosed that the government has propounded to the Chinese government to initiate expert cooperation on border reboot arrangement between China and Hong Kong. Lam believes that the two parties will be able to arrange smooth and orderly travel resumption.  
The chief executive remarked that the Chinese government has made an enormous effort in containing the COVID-19 pandemic and that she does not wish for such effort to be undone due to the travel resumption with Hong Kong.

World Health Organization (WHO) expressed that as COVID-19 continued to mutate in unvaccinated countries around the globe, it will eventually coexist with human and evolve to become similar to influenza pandemic viruses.  
The WHO officials added that, based on its increased transmissibility, the fast-spreading Delta variant remains the most concerning mutant strain, despite the emergence of Mu variant, which is reported to be capable of evading immune protection.

BYD COMPANY (01211.HK)  -2.000 (-0.739%)    Short selling $270.34M; Ratio 22.984%   's BYD Auto announced on its official Weibo that it will host the "BYD e Platform 3.0 Press Conference" at 19:30 today.
Being a brand new pure electric vehicle platform, e Platform 3.0 not only possess the rapid battery charging technology, but also the powerful impetus and endurance.

KINTOR PHARMA-B (09939.HK)  -3.650 (-4.369%)    Short selling $4.63M; Ratio 0.783%   's shareholder Zhuhai Gree Financial Investment announced the placing of 5 million shares of the company, in order to raise $390 million, 
as media report cited relevant documents.
The placing price was $78 per share, representing a 6.6% discount compared to the closing price of the previous trading day. KINTOR PHARMA-B's share price plunged over 5% at one point this morning. The stock last stood at $79.75, down 4.5%.

At the Lenovo Tech World 2021, LENOVO GROUP (00992.HK)  -0.190 (-2.275%)    Short selling $14.70M; Ratio 19.031%   Chairman and CEO Yang Yuanqing unveiled the brand-new and upgraded service brand called "Lenovo TruScale", aiming to expand new IT and new engines.
"Lenovo TruScale" integrates the traditional model of decentralized procurement of hardware, software and services, with the model of segmented implementation of design, construction, operation and maintenance, into a subscription-based, one-stop all-inclusive service model, based on introduction.

Fitch Ratings published a report, stating that despite certain leading Chinese automakers managed to overcome issues of chip shortage and rising raw material costs and maintain or even increase the GPM over 2Q21, the NPMs of many Sino-foreign joint ventures on automobile manufacture deteriorated to below 5% or even posted negative figures due to lower capacity utilization rate.  
Fitch contended that the global chip shortage may persist and forecast the Chinese passenger-vehicle (PV) market to stay weak over 3Q. Correspondingly, the rating institution lowered the full-year PV sales forecast in China from high single-digit growth to approximately 5% growth.

For the first seven months in 2021, Macau's total public financial revenue amounted to MOP60.37 billion, down 17.6% YoY;
among which the total current revenue rose 6.1% YoY to MOP30.4 billion, with an execution rate of 48%; and the gaming tax revenue climbed slightly by 0.04% YoY to MOP22.202 billion, with an execution rate of 44.4%, according to the budgetary execution data released by Macau's Financial Service Bureau.

YIDU TECH (02158.HK)  +0.400 (+1.266%)    Short selling $3.63M; Ratio 13.853%   announced that, according to a report published by market research institution IDC, the company's Yidu Cloud was ranked number one among the major providers of medical big data solutions in China last year with a market share of 18.6%. 
IDC's report showed that medical big data's value in propelling research and innovation and in improving the quality of medical services has been widely recognized across the sector and the continuously growing market demand will supply substantial room for growth for Yidu Cloud.

Huawei is scheduled to release a new large-screen smartphone featuring a 14-inch monitor 
at the new product launch event at 19:30 next Monday (13th), reported Chinese media.

AMC Entertainment Holdings, Inc. (AMC.US)  +3.810 (+8.655%)    said over two million people had watched Marvel's "Shang-Chi and the Legend of the Ten Rings"
at its U.S. theaters from Thursday to Sunday following the film's Labor Day weekend debut.  The film broke its 2013 admission revenue record for the U.S. Labor Day weekend, said AMC Chief Executive Adam Aron.

BlackRock, Inc. (BLK.US)  has raised around US$1 billion 
for its first Chinese mutual fund run solely by a foreign company that is permitted to sell to Chinese investors.

Fitch Ratings announced to have downgraded the Long-Term Foreign-Currency Issuer Default Ratings (IDR) of EVERGRANDE (03333.HK)  +0.180 (+5.042%)    Short selling $27.04M; Ratio 8.799%   and its subsidiaries Hengda Real Estate Group Co., Ltd and Tianji Holding Limited, to "CC" from "CCC+", to reflect its tight liquidity situation and higher default risks.  
EVERGRANDE contended during the announcement of its interim results that it may default on its debts, if it fails to mitigate the liquidity issues that it is now facing, the report added.
Related NewsCiti Chops EVERGRANDE (03333.HK) TP to $4; Rated Sell
EVERGRANDE opened low by almost 2% this morning (8th) to post at $3.5. The stock last posted $3.53, down 1.1%, on a volume of 35.66 million shares, involving $125 million.


The Government announced the resumption of quarantine exemption for persons returning from both Mainland areas other than Guangdong Province and Macao under the Return2hk Scheme, given the COVID-19 pandemic situation has stabilised in Hong Kong, Macao and the Mainland. 
From 00:00 midnight, September 8 onwards, the online booking system will accept quota applications from Hong Kong residents returning to Hong Kong from both Mainland areas other than Guangdong Province and Macao. To ensure that Hong Kong residents would be returning to Hong Kong under the Return2hk Scheme in a gradual and orderly manner, a quota arrangement for specific boundary control point will still be put in place after the resumption of the Scheme. There are 3,000 daily quotas for residents returning via the Shenzhen Bay Control Point, 2,000 for the Hong Kong-Zhuhai-Macao Bridge (HZMB) Hong Kong Port, and 1,000 for the Hong Kong International Airport (HKIA).

In reply to GRAND HOMM's sales suspension, the Transport and Housing Bureau (THB) said the Consent Scheme aims to regulate the sale of uncompleted first-hand residential properties and protect buyers. 
In April, THB was informed by GRAND HOMM's developer of cost overruns. The developer failed to provide evidence for its financial ability to settle budget overruns despite Lands Department (LandsD)'s requests. Therefore, LandsD scrapped the pre-sale consent for the project, which is privately held by GOLDIN FIN HOLD (00530.HK)  0.000 (0.000%)   Chairman Pan Sutong, on 27 August.

KUAISHOU-W (01024.HK)  -1.900 (-1.865%)    Short selling $265.99M; Ratio 15.142%   announced that, after becoming the first short video platform to feature panoramic videos last year, 
the company will fully support panoramic 4k videos and live streaming. Panoramic video technology is already widely employed by KUAISHOU-W's users at the moment, with 3,815 content creators dedicated to making panoramic videos, the company added.

GEELY AUTO (00175.HK)  -0.700 (-2.443%)    Short selling $202.55M; Ratio 24.566%   announced that the Company entered into the Subscription Agreement with ECARX (an automotive intelligence technology company) and ECARX Stakeholders to subscribe for 4.3215 million Series B Preference Shares of ECARX at USD11.57 per Share for a cash consideration of almost USD50 million.  
Li Shu Fu (Controlling Shareholder and Chairman of GEELY AUTO), Li Dong Hui, Daniel (Vice Chairman) and An Cong Hui (Executive Director) hold 49.51%, 0.77% and 1.12% of the total outstanding shares of ECARX on an As-Converted Basis, respectively.

China's Foreign Ministry spokesperson Hua Chunying announced that, at the invitation of Indian Prime Minister Narendra Modi, President Xi Jinping will attend the 13th BRICS Summit
via videolink in Beijing tomorrow (September 9).

DONGFENG GROUP (00489.HK) announced that on 7 September, Dongfeng Motor (Hong Kong) (a subsidiary of the Company) and BNP entered into the Agreement,
pursuant to which BNP agrees to procure purchasers for up to 36.06 million ordinary shares of Stella, representing 1.15% of Stella’s share capital, with a total consideration of EUR600 million.

The Qingmao Port connecting Macau's Ilha Verde (Qingzhou) and the Intercity MRT Zhuhai Station is officially commissioned today, with an opening ceremony set for the morning, reported Radio Macau
. The entry and exit channels will be put into operation in the afternoon.

China Beijing Equity Exchange (CBEX) and Beijing Green Exchange have reached an agreement respectively with CM BANK (03968.HK)   (600036.SH)'s Beijing branch on a strategic alliance.
According to the agreement, CBEX and CM BANK's Beijing branch will collaborate on aspects such as M&A loans, cross-border M&A integrated financing, supply chain finance, etc..  CM BANK and Beijing Green Exchange, on other hand, will team up to work on aspects including green financial products, innovative service models, environmental trade consultation, etc..

Struck by the pandemic, China had designated about 7,413 daily flights for domestic routes in August, down 39.91% monthly 
according to China Air Transport Association (CATA)'s report.

Different Chinese government departments have rolled out regulatory measures one after another, overseeing platform economy, education and training as well as information safety, for quite some time, as a piece of commentary said on People's Daily.  
The article suggested that China should place equally hardline emphasis on regulation and development. On one hand, rules have to be set with an aim to guide companies to follow the leadership of the Chinese Communist Party, while serving the economic social development in the grand strategy.
On the other hand, regulation is for the sake of healthy development. In future, China will push forward high-level opening-up steadfastly by protecting the legitimate rights of foreign capital, fostering level-playing field for domestic and foreign companies, reinforcing transparency and foreseeability of policies, and so on.

XIAOMI-W (01810.HK)  -0.600 (-2.400%)    Short selling $297.49M; Ratio 19.723%   's statement disclosed that on September 7, it repurchased 167,200 shares of the company on the Stock Exchange at a price of $24.95 per share, 
involving a total of about $4.17 million. YTD, the company has repurchased a total of 39.5472 million shares, accounting for 0.16% of the company's share capital.

GANFENG LITHIUM (01772.HK)  -4.900 (-3.006%)    Short selling $13.64M; Ratio 4.228%   announced that Shen Haibo, Xu Jianhua and Fu Lihua plan to reduce their shareholding in the Company by not more than 520,000 A shares (i.e. 0.0362% of the total share capital of the Company) within 6 months after 15 trading days from today.

TENCENT (00700.HK)  +7.500 (+1.455%)    Short selling $2.51B; Ratio 22.192%   's statement disclosed that, on 7 September, it has repurchased 69,200 shares of the company on the Stock Exchange, at a price ranging between $510-516, involving approximately $35.58 million. Year to date, the company has repurchased a total of 2.2318 million shares, accounting for 0.02326% of the company's share capital.

CKH HOLDINGS (00001.HK)  -0.300 (-0.545%)    Short selling $29.73M; Ratio 17.732%   's statement disclosed that it has repurchased 290,000 shares of the company on the Stock Exchange on 7 September, at a price ranging between $55.05-55.75 per share, involving a total amount of approximately $16.055 million.  Year to date, the company has repurchased a total of 16.9785 million shares, accounting for 0.4403% of the company's share capital.CARRIANNA (00126.HK)  -0.040 (-4.545%)   announced that the Company and KAISA GROUP (01638.HK)  -0.040 (-1.646%)    Short selling $1.83M; Ratio 17.014%   entered into a strategic cooperation framework agreement for a term of three years. Under which, both sides will orderly commence strategic cooperation on various areas including property development, urban renewal, business operation management, property management, logistics management and capital operation, etc., initially in the Guangdong-Hong Kong-Macao Greater Bay Area and gradually expanding to other core cities.

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